Real Adds Pay Services

8/25/2002 8:00 PM Eastern

By: MATT STUMP

Real Networks Inc. last week unveiled two new subscription content packages — one involving Internet radio stations, and a second offering college-sports content — as well as its new RealOne streaming software.

RealOne can play content in nearly all media file formats, including rival Microsoft Corp.'s Windows Media Player, the company said.

The RadioPass offering affords access to 50 commercial-free music streams for $5.95 a month, or $12.95 a month when combined with Real's overarching SuperPass subscription service.

College SportsPass is a separate service that will offer live audio broadcasts of top college football, basketball, baseball and other sports from 45 institutions affiliated with the Official College Sports Network. In addition to the games, fans can view audio or video from press conferences; watch weekly coach's shows and highlight shows; and access live statistical breakdowns and league standings.

College SportsPass will cost $6.95 a month, or $13.95 a month when combined with Real's base $9.95-per-month SuperPass service.

The new RealOne Player will allow consumers to view and listen to Internet content streamed in RealAudio, RealVideo, MP3, Windows Media, Apple Computer Corp.'s QuickTime and the Moving Picture Expert Group's MPEG-4 formats, as well as 50 other specifications, the company said. The new player also supports CD burning and DVD playback.

The two new subscription services will fall under the domain of Merrill Brown, the newly named senior vice president of RealOne services for the Americas and the former editor in chief of MSNBC.com.

MSNBC.com was a leader in developing broadband content, and Brown remains bullish that Internet multimedia content can drive broadband growth.

"The data on consumer broadband subscription is very promising," he said. "[RealNetworks has] invented a whole new distribution system for multimedia content, news, information and entertainment at work."

Much like cable television, subscription revenue will form the fiscal foundation for this new offering.

"Maybe there will be other business models, but this [subscription] is a very good one at this moment in history for this medium," Brown said. "Unlike broadcast or cable television, which has the same expense line regardless if 10 or 10 million people are watching, the expense line in this category, Internet multimedia, grows with audience because of the cost of pipe and the cost of serving the audience.

"So having a clear revenue stream or multiple revenue streams built around subscriptions makes an enormous amount of sense for technologically complex multimedia services," said Brown.

He added: "We've got to think about programming RealOne as a television programmer would, thinking about different groups within society. We're going to build a community strategy."

CABLE RELATIONSHIPS?

SuperPass — an amalgamation of sports, news and information programming — looks a lot like basic cable, with niche services, like college-sports offerings, circling the outside.

But a question that's dogged basic-cable packages for years remains unanswered: Will SuperPass set its price too high?

"That's a good question," Brown said. "Obviously, we don't have a lot of data on this. If we can keep the current economics where they are and keep the rights fees manageable, I think for products like RealOne SuperPass, the pricing is appropriate for now."

Real sees its service as a cable collaborator, and not a competitor, Brown added.

"It's clearly a goal [of Real's] to build multifaceted relationships with anybody who is a credible distributor," said Brown. "Cable operators and telephone companies obviously fit that bill. We're going to try to do some of those deals to experiment with them.

"In the early days of [Excite@Home Corp.], they were doing deals with programmers to try and get exclusive broadband content," he added. "I thought at MSNBC those deals made sense. We made a number of those deals ourselves.

"They make enormous sense both for the programmer and for the distributor because it's another way to get some resource to help programmers build Web content."

Brown intends to expand Real's relationships with programmers.

"One of the key challenges I face is working with Fox Sports and others to help them think about how to make their television content into Web content," he said.